Mortgage lenders and advisers would like to see a government U-turn following the relaxation of EPC legislation for landlords, according to new data from Mortgage Advice Bureau.
49% of mortgage lenders and 32% of advisers would welcome any decision to reverse the EPC changes, whether by the current or a newly elected government.
Following the government scrapping plans aimed at encouraging landlords to upgrade the energy efficiency of their properties, Mortgage Advice Bureau polled some of the UK’s largest mortgage lenders, as well as advisers, to get their views on the sector – with a particular focus on ‘green homes’.
When asked what the main thing the mortgage industry needs to do to accelerate efforts of green mortgages, almost one in three (31%) lenders cited increasing public awareness and education about the benefits of such products. Meanwhile, advisers believe offering more competitive interest rates and incentives for green mortgage products is a priority (25%).
Advocating for government policies and incentives for green mortgages was also ranked highly amongst lenders, with almost three in ten (29%) confirming this is important.
With the ongoing cost of living crisis and increasing costs, lenders believe we need to develop a wider range of green mortgage products tailored to different needs and budgets (22%).
What is the one thing that the mortgage industry needs to do to accelerate efforts in the field of green mortgages?
| Lenders | Advisers | |
| Increase public awareness and education about the benefits of green mortgages | 31% | 22% |
| Advocate for government policies and incentives that support green mortgage initiatives | 29% | 18% |
| Develop a wider range of green mortgage products tailored to different needs and budgets | 18% | 22% |
| Collaborate with builders and contractors to promote energy efficient home improvements | 14% | 6% |
| Offer more competitive interest rates and incentives for green mortgage products | 8% | 25% |
| Encourage financial institutions to allocate more capital to green mortgage lending | / | 7% |
The study also found that 82% of lenders believe that the best way for the government to achieve the need to deliver more energy efficient homes is via builders and lenders. Meanwhile, almost one in five (18%) believe the responsibility falls to builders alone.
Ben Thompson, Deputy CEO of Mortgage Advice Bureau, said: “With climate change continuing to be an issue we all must take seriously, everyone has a role to play to ensure UK homes are more energy efficient. At a policy and industry level, we have a responsibility to push the housing market to a more sustainable future – one that is as energy efficient as possible. The fact 82% of lenders believe that the best way to achieve energy efficient homes is via builders and lenders is a surprise. There should be cross industry collaboration and working with intermediaries who too can have a big role to play in the move towards a greener future.
“The UK has some of the oldest and least efficient homes in Europe, so the government scrapping plans to encourage landlords to improve their homes is not going to help solve the problem. However, we must note the concerns of landlords and look to work collaboratively, where the Government focuses on using the carrot instead of the stick to encourage green changes. For example, looking to refund Stamp Duty Land Tax (SDLT) once a property has been retrofitted might be one way to incentivise green changes.
“We must face the reality that the UK will need to upgrade its leaky housing stock. With energy bills in the spotlight, EPC ratings are climbing up prospective buyers’ wish lists, and if the housing market is to meet net zero targets, properties need to be retrofitted. Green mortgage products (and the wider promotion of these) is one part of the puzzle, and now we must ensure these are being put to prospective buyers.